{"id":110,"date":"2018-01-25T03:08:58","date_gmt":"2018-01-25T03:08:58","guid":{"rendered":"http:\/\/www.danaleecpa.com\/blog\/?p=110"},"modified":"2018-01-25T03:10:32","modified_gmt":"2018-01-25T03:10:32","slug":"business-vehicle-use","status":"publish","type":"post","link":"https:\/\/www.danaleecpa.com\/blog\/business-vehicle-use\/","title":{"rendered":"Business Vehicle: Questions &#038; Answers"},"content":{"rendered":"<p><em>IRS rules and exceptions abound, but there are some questions we can answer simply.<\/em><\/p>\n<p>Next to your home, your car is probably the most expensive investment you make. And the costs of paying for and maintaining it can be considerable. Can you recoup some of your investment by claiming vehicle expenses on your tax return?<\/p>\n<p>Sometimes. The IRS has many restrictions on the <a href=\"https:\/\/www.irs.gov\/publications\/p463\">business use of a vehicle<\/a>, and those restrictions have many exceptions. Better to know these upfront than to have to correct a tax return after you\u2019ve filed it. Here are some questions and answers that may help you decide whether you\u2019re eligible.<\/p>\n<h3><strong>How does the IRS identify a &#8220;business vehicle&#8221;?<\/strong><\/h3>\n<p>A car, van, pickup, or panel truck.<\/p>\n<h3><strong>What are transportation expenses?<\/strong><\/h3>\n<p>These are &#8220;ordinary and necessary expenses&#8221; incurred when you, for example:<\/p>\n<ul>\n<li>Visit customers,<\/li>\n<li>Attend a business meeting held at a location other than your regular workplace, or<\/li>\n<li>Go from home to a temporary workplace that is not your company\u2019s principal location.<\/li>\n<\/ul>\n<p>The daily commute to and from your regular office is not deductible. The IRS considers this personal commuting expenses.<\/p>\n<h3><strong>What if I\u2019m on an overnight business trip away from home?<\/strong><\/h3>\n<p>The IRS considers these travel expenses, and they\u2019re reported differently. Your car expense deduction, though, is calculated the same way in both situations.<\/p>\n<h3><strong>What if I use my car for both business and personal purposes?<\/strong><\/h3>\n<p>You\u2019ll calculate the expenses incurred for each by determining how many miles you drive for business and how many you drive for personal reasons.<\/p>\n<h3><strong>I work in a home office. Can I deduct any driving expenses?<\/strong><\/h3>\n<p>Yes, you can deduct the cost of driving to &#8220;another work location in the same trade or business.&#8221;<\/p>\n<h3><strong>How do I calculate my deductible expenses?<\/strong><\/h3>\n<p>There are two options. You can choose between the standard mileage rate and actual car expenses &#8211; depreciation, oil and gas, insurance, and repairs.<\/p>\n<h3><strong>Depreciation? Isn\u2019t that difficult to calculate?<\/strong><\/h3>\n<p>Yes, especially for cars. If you plan to take this kind of deduction, please let us handle your tax preparation for you. Depreciation is very, very complex, and sometimes requires more than one calculation method.<\/p>\n<h3><strong>What kind of business vehicle expense records do I need to maintain?<\/strong><\/h3>\n<p>You know the drill here. If the IRS ever wants to examine your return, it will expect evidence like receipts, cancelled checks, and credit card statements. You\u2019ll need to document the date and location where you incurred the expense. You\u2019ll need accurate mileage records (miles driven, purpose of trip, etc.).<\/p>\n<p>These requirements scream for some kind of organized computer log or written diary, along with a safe place for any paper receipts, bills, etc. There are numerous mobile apps that can help you with this task. We can steer you in the right direction.<\/p>\n<p>If you\u2019re planning to deduct car expenses, it\u2019s important that you keep careful paper or electronic records.<\/p>\n<h3><strong>Where will I be reporting transportation expenses?<\/strong><\/h3>\n<p>If you are self-employed, you will report business-related vehicle expenses on Schedule C or Schedule C-EZ (Form 1040). Farmers should use Schedule F (Form 1040). You\u2019ll also want to complete a <a href=\"https:\/\/www.irs.gov\/forms-pubs\/about-form-4562\">Form 4562<\/a>, which is used to report depreciation and the Section 179 deduction.<\/p>\n<p>Maintaining accurate records for car and truck expenses is time consuming and detail intensive. And that\u2019s once you understand all of the IRS\u2019s rules and exceptions surrounding this deduction. To avoid having to fix completed tax documents that the IRS has questioned, <a href=\"http:\/\/www.danaleecpa.com\/contact.htm\">talk to us<\/a> before you put a vehicle into business use. We\u2019ll be happy to evaluate your transportation situation and guide you through the process.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>IRS rules and exceptions abound, but there are some questions we can answer simply. Next to your home, your car is probably the most expensive investment you make. And the costs of paying for and maintaining it can be considerable. Can you recoup some of your investment by claiming vehicle expenses on your tax return? [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[1],"tags":[],"class_list":{"0":"post-110","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-uncategorized","7":"entry"},"_links":{"self":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/comments?post=110"}],"version-history":[{"count":7,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/110\/revisions"}],"predecessor-version":[{"id":142,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/posts\/110\/revisions\/142"}],"wp:attachment":[{"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/media?parent=110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/categories?post=110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.danaleecpa.com\/blog\/wp-json\/wp\/v2\/tags?post=110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}